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Pre-Market Primer: Stocks Retreat From Highs on Chinese Industrial Data


Beppe Grillo wants to lead the next Italian government.

Stock futures slipped this morning from last week's historic rally as Chinese data disappoints and Europe continues to reel in the wake of the Italian election.

After a string of record highs last week, Dow (INDEXDJX:.DJI) futures slipped 0.05% to 14,352. Futures on the S&P 500 (INDEXSP:.INX), after coming within 14 points of its highest historical peak, sank 0.14% to 1,549.60 and Nasdaq (INDEXNASDAQ:.IXIC) futures fell 0.20% to 2,801.50.

Asian stocks mostly traded higher, though Chinese economic data weighed on the region's equities. Consumer inflation in China rose slightly more than expected to 3.2% on a yearly basis last month, up from 2% in January. The spike might have been caused by spending related to the Chinese New Year holiday. Retail sales disappointed as well, rising 12.3% year-over-year. Economists expected a 14.5% rise. Industrial production in January and February grew 9.9%, missing projections by 0.7 percentage points. This is the slowest rate of growth in output since the global downturn in 2009.

China will break up the powerful Railways Ministry in an effort to make the government less corrupt.

Japanese machinery orders plummeted 13.1% on a monthly basis in January, a far worse decline than expectations of a 1.4% drop.

European shares fell today as the fallout from the inconclusive Italian election continue to cause concern. Protest candidate Beppe Grillo's Five Star Movement, which won a plurality of Senate seats, made it clear this weekend that it wants to lead the next government. GDP figures released today confirmed that Italy is still in recession as the economy shrank 2.8% over the 2012.

Fitch downgraded Italy's debt by one notch to BBB+ with outlook negative on Friday because of the political uncertainty.

German imports stemmed a downward trend. The country's trade surplus fell to 15.75 billion euros in January as imports rose 3.3% and exports rose 1.4%. Factory output in France fell 1.2% on a monthly basis in January after rising 0.9% in December.

The Times of India reported that AT&T (NYSE:T) is considering a stake in India's Reliance Jio Infocomm. The US company might purchase a 25% stake in Mukesh Ambani's telecommunications venture for $3.5 billion. If successful, this would be the largest single foreign direct investment in India.

Dicks Sporting Goods (NYSE:DKS) shares fell 8.1% after reporting fourth quarter earnings of $1.03 per share, missing analyst estimates.

Grocery store operator Kroger (NYSE:KR) shares fell after Hilliard Lyons cut its recommendation to long-term buy from buy.

Twitter: @vincent_trivett
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